Question

If Roberta sells a shirt for $30, and her producer surplus from the sale is $21, her cost must have been:

a) $9
b) $30
c) $51
d) $21

Answer 1

Roberta's cost for the shirt was $9, calculated by subtracting her producer surplus of $21 from the selling price of $30.

Step-by-step explanation:

If Roberta sells a shirt for $30, and her producer surplus from the sale is $21, her cost must have been $9. Producer surplus is defined as the difference between what a producer is willing to accept for a good versus what they actually receive. In this case, Roberta’s willingness to sell the shirt (her cost) plus her producer surplus ($21) equals the selling price ($30), which leads us to a cost of $9 for Roberta.